Columnist Dr. Khawaja Amjad Saeed
discusses the possibility of an economic union in the region.

Prelude

South Asian Association for Regional Cooperation (SAARC)
was set up in 1985. Since then, productive meetings were held to develop
ideas for forging ahead. This unique forum has been struggling to bring
home several messages of goodwill, peace and tranquillity in the region.
On several occasions, heads of states of all SAARC countries met and
agreed on several issues of mutual interest. This platform has enabled
sharing of thoughts, exchange of ideas and creation of awareness regarding
innovative initiatives to be taken for achieving the objectives of SAARC
in the light of founding principles laid down for SAARC. Hopefully, these
initiatives will continue in future so that efforts are solidly undertaken
for alleviating poverty, accelerating socio-economic and scientific
progress in SAARC region to pave the way for ushering in an era of
prosperity on wider dimensions. The sincerity and commitment by the
Governments and the people of SAARC region are the crying need of today.
This piece presents some thoughts on the theme of a dream about SAARC
Economic Union by 2010.

SAARC vision 2010

Status quo is never a permanent feature. Change is an
on-going process. South Asian Economic Union by year 2010 can be the
result of a positive thinking approach. An excellent debate has been
initiated in this respect. It is hoped that this subject of vital
importance will be discussed and debated at various levels namely
Government, Private, Public, NGOs institutional and even individual
levels. Ideas need to be pooled. Experiences need to be shared. Dimensions
of cooperation need to be identified and a framework needs to be evolved
to serve as a basis for the proposed South Asian Economic Union by 2010.

SAARC: Principles

Clear cut principles for SAARC were spelled out at
the time of its establishment and these require firm commitment by all the
SAARC countries. The cooperation among SAARC countries cannot be a
substitute for bilateral and multi-lateral cooperation but shall
complement them. Further, such cooperation shall not be inconsistent with
bilateral and multi-lateral obligation.

Principles on which cooperation shall be based
include respect to the following:

1) Sovereign Equality.

2) Territorial Integrity.

3) Political independence.

4) Non-interference in internal

affairs of other states and mutual

benefit.

The foregoing principles represent strong conceptual
logistics on the basis of which South Asian Economic Union can be strongly
visualized by 2010. All the SAARC countries must strictly adhere to the
above principles as a mark of respect to each other and help realize the
goals for which SAARC has been established.

SAARC: Objectives

Objectives of SAARC include promotion of
socio-economic developments within SAARC countries and also develop a
productive relationship with regional and international organizations.
Based on this, objectives can be categorized as under:

1)Inter-SAARC

a)To promote the welfare of the people of South-Asia and to improve
their quality of life.

d)To promote and strengthen collective self-reliance among the
countries of South Asia.

e)To contribute to mutual trust, understanding and appreciation of
one anotherís problems.

2)Intra-SAARC

a) To strengthen cooperation among themselves in internationalforums and with other developing countries.

b) To strengthen
cooperation with other developing countries.

c) To cooperate with internationaland
regional organizations.

SAARC: Work Packages

Ten areas of work within SAARC region were identified
and assignment were given to various SAARC countries. Topics were
allocated together with the countries responsible for the same. India was
given four assignments namely, Business Information and Data Networking,
Human Resource Development, Science and Technology and Social Dimension of
Business Development. Pakistan had two topics i.e., Trade and Investment.
Sri Lanka was given an interesting topic namely, women entrepreneurs.
Bangladesh was expected to handle telecommunication. Travel and Tourism
were to be handled by Nepal. Bhutan and Nepal had joint responsibility for
energy. There is a need for an accelerated effort to push ahead in respect
of above assignments.

SAARC: Background for South Asian Economic Union
by 2010

Regional Cooperation has been a subject of great
interest in several parts of the world. However, the idea of regional
cooperation in South Asia was first evolved during 1977-80 and Bangladesh
took the initiative to bring up the idea of setting up SAARC. In August
1983, Foreign Ministers met in New Delhi and Declaration on South Asian
Regional Cooperation (SAARC) was made and formally Integrated Programme of
Action (IPA) was launched.

In 1985, Charter of SAARC was adopted in Dhaka. IPA,
consisting of eleven areas of cooperation, is the key component of the
SAARCís functions. These include agriculture, communications, education,
culture and sports, environment and meteorology, health and population
activities, prevention of drug trafficking and drug abuse, rural
development, science and technology, tourism, transport and women in
development.

Initial steps taken for a long-term objective of
South Asian Economic Union by 2010 so far have included the following:

1. Agreement on SAPTA (South Asian Preferential
Trading Arrangement) was signed during the Seventh SAARC Summit in Dhaka.
This entered into force on December 7, 1995. This had the following two
forward linkages:

a) Gradual reduction and eventual elimination of tariffs within SAARC.

2. Bold initiatives have also been taken in respect
of developing institutional framework. These institutions need to be
strengthened for their vibrant functions so that positive steps are taken
to crystallize the dream of South Asian Economic Union by 2010.

Some of the pertinent institutions include:

a)Promoting people-to-people contact.

b)SAARC Regional Institutions:

i)SAARC Agricultural InformationCentre
(SIAC), Dhaka,Bangladesh.

ii) SAARC Documentation Centre(SDC),
New Delhi, India.

c) The following SAARC Fundshave
been established so far:

i)SAARC Fund for RegionalProjects
(SFRP) (1991).

ii)SAARC - Japan Special Fund (Sept. 27, 1993), Kathmandu,Nepal.

iii) South Asian Development Fund (SADF)-(1995) New Delhi, India.

There is a need to consolidate gains from the above
institutional framework and carry forward the same towards achieving the
goal of South Asian Economic Union by 2010.

SAARC: Logistics for vision 2010

SAARC is the largest geo-economic block of the world
with 1.2 billion people. Its GDP, based on purchasing power parity is $
3.57 trillion. Its combined average growth is over 7%. Its plan includes a
common market i.e. SAPTA. This represents a hope for the largest pool of
poor people of the world, with a consumer base of over 425 million people
in the middle class bracket. It is larger than any economic block of the
world. It has the potential of contributing a great deal to the ever
evolving global economy.

SAARC region has the following unique features of the
world:

1. It has one of the most ancient living civilizations in the world.

2. It is a sleeping giant and hasstarted
to move its arms.

3. All religions, faiths, and ideologies of the world live together.

4. It is maturing and is poised to become an important economicforce
forming a common marketcalled
SAPTA
and later SAFTA.This is
expected to usher in a newera
which will change all traditionally
known
economic parameters.

5. It has the largest irrigated land areas in the world with over 67million
hectares.

6. It has the second largest railway network of the world after the
US.

7. It offers one of the largest English speaking area.

8. It has labour force of 423 million people. This is the largest of
any other economic block in the world.

9. It also is home to some of the poorest living people on the earth
but has increased
job
opportunities and self-employment schemes in all SAARC countries.

10. Having a combined averagegrowth
rate of more than 7% by year 2000, SAARC will have acombined population of 1.3 billionpeople
and the total consumer base will surpass 750 million. This will be the
largest number of consumers in a single economic block in the world.

SCCI: A strong logistic for South Asian Economic
Union by 2010

SAARC Chamber of Commerce and Industry (SCCI) was set
up in 1992 as the official recognition by all the regional governments and
as the apex body of all the national federations of chambers of commerce
and industry with its headquarters in Pakistan. It consists of seven
component members representing each country. Its mission is to enhance
economic cooperation with a view to improving SAARCís position in the
World trade as well as within SAARC itself.

SCCIís philosophy is as under:

It will gradually endeavour to achieve SAARC Economic
Union through:

1)Economic Cooperation, and

2)Bring about harmonious and

healthy economic relations

among the business communi-

ties of the region.

The general belief is that the above Union will serve
as a step forward to globalization and will help to overcome the
socio-political differences within the region.

SCCIís contributions towards establishment of South
Asian Economic Union by 2010 are suggested to be in the following
dimensions:

1) Serve as voice of business community of the region at national,
regional and global foram.

2) Endeavour to bring about necessary economic cooperation in all spheres of the SAARC region.

3) Encourage investments and joint ventures within and outside the
region to ensure that the benefits of economic cooperation are realised for the region.

4) Encourage private sector in the process of industrialisation and
also to act as the change agent while allowing the governments to develop
the infrastructure jointly with them and setting in place policies which
can minimise dislocations to economic growth and social development.

Intra-Regional Investment

The business community of SAARC need to be encouraged
to come forward with intra-regional investment proposals covering the
following areas:

1)Investment promotion.

2)Investment protection.

3)Repatriation of profits.

4)Avoidance of double taxation.

5)Arrangements for settlement of

trade disputes among SAARC

member states.

Strategy needs to be developed to evolve common
agreements for the region as a whole or sub-region on bilateral basis for
the above aspects. The share of SAARC in World Trade, based on the World
Development Report 2002, is 1.03%. This shows that the scope of
intra-regional trade is very big.

Agenda for South Asian Economic Union by 2010

Year 2001 was set as target date to achieve SAFTA.
This was expected to set pace of development in core trade and economic
cooperation in the member countries. However, the dream has not yet been
realized.

The Ninth SAARC Summit was held in Male, Maldives
during May 12 - 14, 1997 and directed the establishment of Group of
Eminent Persons (GEP). This group was asked to undertake the following
tasks:

1. Develop a long range vision.

2. Formulate a perspective plan

of action including a SAARC

agenda for 2000 and beyond.

3. Spell out the targets that can

and must be achieved by the

year 2020.

The recommendations were presented in the two-day
SAARC Summit held in January 5-6, 2002 in Kathmandu, Nepal. South Asian
Economic Union by 2010 is expected to result as under:

1. With new enthusiasm in the markets and shifting economies on
combined scale, dependence of

their GNP will reduce in comingyears.

2. An increased collaboration andharmonious
relationship could helpreduce
the defence budgets to much lower points. On the assumption that these funds are allocated
for developmental programmes,
the
growth indicators will sharply move forward.

3. Marketing plans for these countries can be more or less unique and
specially for consumer products and services like entertainment.

SAARC Summit January, 2002

Two days SAARC Summit was held in Kathmandu, Nepal
during January 5-6, 2002. it visualized the establishment of South Asian
Economic Union. Pre-requisites to this dream were identified as under:

2.Foster good neighbourly relations, relieving tensions and building
confidence.

3.Finalize a regionally agreed investment framework to meet
investment needs of the member states.

4.Promote South Asia has a common tourist destination by upgradinginfrastructure, air linkages,
simplification and harmonization of administrative procedures and joint
marketing.

5.Combat the problem of poverty with a new sense of urgency.

6.Focus on rural micro-credit programmes for women and disadvantaged,
widen opportunities for
gainful
employment and reconstitute the independent South Asian Commission on
poverty alleviation.

7.Finalize the SAARC Social Charter including:

a)Poverty eradication.

b)Population stabilization.

c)Empowerment of women.

d)Youth mobilization.

e)Human resource development.

f)Promotion of health and nutrition and projection of children.

Conclusion

It is high time that all the SAARC countries must
respect each other and strive for developing peace and tranquillity in the
region and give genuine tribute to the principles of SAARC and implement a
plan paving the way for institutionalising South Asian Economic Union by
2010. This is needed to usher in a new era of prosperity for the teeming
millions of the above region.

* President-Association of Management Development
Institutions of South Asia (AMIDSA) (1993-96). Member, Governing Council,
International Federation of Accountants (IFAC), New York (1997-2000).
President, South Asian Federation of Accountants (SAFA) (1997). President,
Institute of Cost and Management Accountants of Pakistan (ICMAP)
(1997-99). Former Pro Vice Chancellor, University of the Punjab, New
Campus, Lahore. Founder Director, Institute of Business Administration (IBA),
University of the Punjab, Lahore.